Microgrid acceptance by utilities? Only time will tell

In an essay published in the September 2010 issue of Electric Perspectives Charles Bayless made the claim that microgrids were not reliable enough to be used without being backed up 100% by the power grid. This view is quickly becoming obsolete.

A recent data roundup by renewable energy industry analyst Paul Gipe shows that variable renewables are meeting much larger percentages of grid power than previously thought possible in some European countries. Wind provided nearly 20 percent of Portugal’s power and 30 percent of Denmark’s in 2012. Wind and solar combined contributed more than 18 percent of Spain’s power and 11 percent of Germany’s in 2011. (More recent data shows that renewables now provide about 25 percent of Germany’s total grid power, and as much as 50 percent of its peak power.) A study by German engineers found that its grid can handle up to a 40 percent share of renewable power without needing much storage or baseload power for backup.

As the technology for renewable energy generation and storage improves, prices fall and microgrids become more and more cost effective. In addition, several microgrids from across the US and world are acting as case studies proving the viability and utility of microgrids to the overall energy grid. Another hurdle, though, is gaining acceptance for microgrids from utilities who control the power grid.

“While utilities have shown institutional biases against the entire concept of microgrids for decades, extreme weather events and the growing recognition of microgrids as potential sources of demand response resources are building engineering and cultural support for these systems in a variety of settings,” Asmus said in April.

Utilities may be more friendly to what Asmus calls “virtual power plants” (VPPs). VPPs may or may not have generation or storage capacity, so they cannot island, but they do have software to remotely and automatically dispatch and optimize generation, demand response, and storage in a single, secure web-connected system.
VPPs and microgrids could become valuable partners for utilities by relieving overstressed and congested points on the grid, reducing the need for building new generation and transmission capacity, and making it easier to manage voltages at grid extremities. Integrating VPPs, microgrids, and more renewable power into the grid requires more advanced grid management software, but it can squeeze a lot more utility out of both conventional and renewable generators, which is cost-efficient.

On the other hand, if deployed at scale with storage capacity, microgrids could reduce the need for large amounts of baseload overcapacity sitting idle just in case it’s suddenly needed. Instead of needing to suddenly ramp up 1,000 megawatts of power to compensate for an outage elsewhere in the grid, a network of microgrids could simultaneously reduce demand and export power to the grid in a distributed fashion, while maintaining the required frequency and voltage parameters.

The solution is an optimistic one where utilities embrace microgrids as an asset. As microgrids continue to become more and more cost effective and reliable, utilities will be able to benefit from the added reliability, storage, and stability that they can bring with them.